Taiwan's Stock Market: Is It a Bear Market? Regulatory Insights and Investor Concerns

Chairman Peng Jin-lung Addresses Market Downturn and Investor Risk in Taiwan

During a meeting with the Finance Committee, legislator Lai Shyh-bao raised concerns regarding the performance of Taiwan's stock market. Lai Shyh-bao noted a 22% decline from mid-last year to the beginning of this year, questioning whether this constituted a bear market. He also inquired about the potential impact of the U.S. temporarily postponing tariffs for 90 days on the upward trajectory of Taiwan's stock market.

Peng Jin-lung, Chairman of the Financial Supervisory Commission (FSC), responded by stating that the recent drops in the Taiwan stock market in the past three days were a normal correction. He explained that, according to established definitions, the market had not yet reached the threshold of a "bear market" and had stabilized recently. He further addressed concerns about investors facing margin calls and potential systemic risks.

Lai Shyh-bao highlighted the fears of many investors facing margin calls, potentially using insurance policies or loans to cover their positions. He questioned whether a further market decline could trigger a systemic crisis and whether the new investors in the market were primarily younger individuals.